Latest Update

Wednesday, April 30, 2008

The President of the Association of Chartered Certified Accountants Ghana, Kwame Antwi Boasiako has said the accountancy profession is open to professionals of all walks of life.

In his view, medical officers, teachers, engineers among others who have keen interest in the profession could simply start afresh from the basics and would be welcomed into any accounting institution afterwards.

Mr. Antwi Boasiako spoke to The Statesman after a press soiree organised for the media by the Association of Chartered Certified Accountants in Accra on over the weekend.

The programme was organised to offer a platform for members of ACCA to interact and share ideas with the media. It was to also offer opportunity for the media to keenly monitor the activities of the accountancy Body with regards to its stance on issues related to the country's economic and contribution to national development.

Mr Antwi Boasiako disclosed that professionals from other institutions who are interested in becoming accountants should start accounting afresh from the Institute of Professional Studies which has the skills to transforms their knowledge in the accounting way.

This, he said will put them in good shape to write any of the professional examinations afterwards and possibly join the ACCA.

He described ACCA as a global accountancy body which has been in existence for over 100 years with about 122,000 members and 325,000 students in 175 Countries.

"Our aim is to offer business-relevant, first choice qualifications to people of application, ability and ambition around the world. We use our expertise and experience to work with governments, donor agencies and professional bodies to develop the global accountancy profession and to advance public interest, he said.

According to him one needs to complete 14 papers with a minimum of practical experience among other ethical modules to become a member of ACCA.

Meanwhile, the ACCA has announced it will hold its Annual General Meeting on May 28 this year to deliberate on last year's performance. The meeting, Mr. Antwi Boasiako said will afford members the opportunity to set new strategies and targets in the interest of all members and their clients to ensure continuous success in their endeavour.

The body has about 1,000 members and 12,000 students studying at various levels of the ACCA examination.

Tuesday, April 29, 2008

Current accounting rules for insurance companies are so different from those in other industries that they may not show investors the true economic realities the firms are facing, a top international accounting rulemaker said on Tuesday.

"Insurance accounting around the world is broken," said Tom Jones, vice chairman of the International Accounting Standards Board, at a Pace University accounting conference in New York.

To support his point, Jones said he believed the price-to-earnings ratios of insurance companies, a financial measure often used by investors to value a firm, would be much higher if insurance company bookkeeping was clearer.

However, he added that accounting rulemakers faced a challenge in revising insurance accounting standards.

Monday, April 28, 2008

Accounting standard setters for the United States and China have signed an agreement designed to strengthen cooperation and communication between the two countries, the Financial Accounting Standards Board said on Monday.

The memorandum of understanding, signed April 18, will help the two countries collaborate amid a global push for a common set of high-quality accounting standards.

FASB and the China Accounting Standards Committee will strive to exchange opinions regularly and build the technical foundation for sharing views on convergence of accounting standards, the memo said.

China's accounting standard setter will send staff to work at FASB on a regular basis to research U.S. accounting rules and the Norwalk, Connecticut-based group's convergence efforts with London's International Accounting Standards Board.

FASB Chairman Robert Herz said the goal of achieving a common set of high quality accounting standards would "ultimately facilitate economic relations between the U.S. and China." (Reporting by Rachelle Younglai, editing by Gerald E. McCormick and Lisa Von Ahn)

Sunday, April 27, 2008

In April, accountants scramble to prepare client tax returns for the end-of-the-month deadline. It means long hours and searching for extra bodies to cope with the crunch. Horwath Orenstein, a 100-person chartered accounting firm in Toronto, has found a better way --outsourcing the work to India.

"We discovered it seven to eight years ago from networking in the United States," says partner Gary Marcus. "We found the U.S. was getting into it very deep, primarily from the processing of U.S. tax returns."

Friday, April 25, 2008

Accountants are not over the moon about their finance systems. This is despite packaged software being around for nearly 30 years.

Charity Finance surveyed 300 organisations in the not-for-profit sector on the use of IT. Just 11% rated their accounting systems as very good, while 45% viewed their systems as average or poor. Nearly one-third were considering replacing their systems in the next year. Not impressive reading. While this research only looked at one ‘vertical’ market, I believe this picture is repeated in the commercial world.

Compare this to other packaged software, such as spreadsheets or word processors. User satisfaction levels are much higher and the market has concentrated into a few applications. By contrast, there are thousands of accounting software packages on sale or in use worldwide.

Accountants are not over the moon about their finance systems. This is despite packaged software being around for nearly 30 years.

Charity Finance surveyed 300 organisations in the not-for-profit sector on the use of IT. Just 11% rated their accounting systems as very good, while 45% viewed their systems as average or poor. Nearly one-third were considering replacing their systems in the next year. Not impressive reading. While this research only looked at one ‘vertical’ market, I believe this picture is repeated in the commercial world.

Compare this to other packaged software, such as spreadsheets or word processors. User satisfaction levels are much higher and the market has concentrated into a few applications. By contrast, there are thousands of accounting software packages on sale or in use worldwide.

Thursday, April 24, 2008

The Continuing & Professional Development (CPD) division of San Jacinto College is offering scholarships for Automated Bookkeeping Specialist Certification training.

“Students enrolled in this program will develop marketable skills because the training covers the most current bookkeeping concepts and procedures,” said David Lewis, director of business and professions. “Students will learn how to effectively use QuickBooks to prepare worksheets, financial statements and journal entries.”

Course topics include, but are not limited to, understanding accounting concepts and procedures; analyzing and recording business transactions (debits and credits); posting to the ledger; and, preparing the financial statements from the worksheet.

Wednesday, April 23, 2008

NEWS from our Department of Poetic Justice: On April 15 - the tax filing deadline - the House of Representatives voted to bar the Internal Revenue Service from using private debt collection agencies to gather unpaid taxes. The measure would shut down a money-wasting IRS program that hires private firms to find delinquent taxpayers and collect debts. Problem is, the program costs more than the money that is collected.

Yes, you read that right. According to testimony in Congress this month, the IRS has spent about $75 million to run this program and collected a net $27 million - "and that's after paying $7.7 million in commissions," according to U.S. Rep. Earl Pomeroy, D-N.D.

This is a classic example of Washington bookkeeping: Twenty-five cents out of every dollar goes to the private collection agency, but after factoring in the start-up costs, overhead and other expenses required to oversee the program, it's a money-loser. The IRS hopes to break even by 2010, but don't look for any money-back guarantees on that.

Tuesday, April 22, 2008

No matter what kind of business you operate, keeping financial records is probably not what you do best. You would probably rather spend your time selling your product or service. However, if you are going to run a successful business, accurate and timely financial information is a must.

Here are some of the reasons why you need a good record keeping system.

Monitoring the success or failure of your business: It is hard to know how a business is doing without a clear financial picture. Are they making money? Are sales increasing? Are expenditures increasing faster than sales? Which expenses are too high based on their level of sales? Does some expenditure appear to be “out of control?”

Providing the information you need to make decisions: Evaluating the financial consequences should be a part of every business decision they make. Without accurate records and financial information, it may be hard for them to know the financial impact of a given course of action. Will it pay to hire another salesperson? How much will another production employee cost? Is this particular product line profitable?

Obtaining bank financing: A banker will usually want to see business’s balance sheet, income statement and cash flow budget for the most current and prior years as well as projected statement showing the impact of the requested loan. A banker may even want to see some of their bookkeeping procedures and documents to verify whether they run their business in a sound and professional manner.

Obtaining other sources of capital: If a business has reached the point where they need to take in a partner or if they need capital and are thinking of taking in an outside investor, partner/investor will want to become familiar with business’s financial picture. They will need to produce a list of financial information they need. Even their supplier and other creditors may ask to see certain financial record as well. Such information may be produced by their outside accountant but it is based on their day-to-day bookkeeping.

Budgeting: All businesses should use a budget for planning purposes. A budget will help keep all businesses stay on track by forecasting their cash needs and helping them control their expenditures. In addition, if they are seeking bank financing or other sources of capital, a banker or prospective investor will probably want to see their budget as evidence that their business is well planned and stable. They must have solid financial information to prepare a meaningful budget.

Preparing income tax return: Whether a business is a sole proprietorship, partnership or corporation, they must file an income tax return and pay income taxes. With good records, preparing an accurate tax return will be easier and they are more likely to be able to do it on time. Poor records may result in their underpaying or overpaying their taxes and filing late results in paying penalties. If their accountant prepares income tax return, poor records will certainly result in paying higher accounting fees. If their business is a partnership, not only will they have to prepare a partnership tax return but it also will pass directly to the tax return of each partner.

Complying with federal and state payroll taxes: If your business has employees, they must be aware of the rules and regulations relating to payroll taxes. Payroll tax deposits must be made according to strict deadlines. Late payment of payroll taxes results in severe and unnecessary penalties. Also, they must file a payroll tax return every quarter which they must reconcile with the payroll deposits made during the quarter. Then at the end of the year, they are required to give their employees and the government W-2 forms which must agree with their quarterly payroll taxes. Sound bookkeeping practices will make compliance with all these payroll rules easy. Poor records will make it impossible.

Submitting sales taxes: If a business collects sales tax from their customers, good records will make it easy for them to compute the tax due and prepare the required payments and reports.

Distributing profits: If a business is a partnership, they will need good records to determine the correct amount of profits to distribute to each partner. If a business is operating as a corporation, they must determine the company profits that they will be paying out as dividends to the shareholders.

Sunday, April 20, 2008

Sir, Within the pages and pages of press comment concerning the current turmoil in financial markets no one has answered the question, why?

How can a financial institution be allowed to set the worth of non-liquid assets held on its books, where there is no published value for such an asset and nobody wishing to purchase it? This is the same as a homeowner deciding his house is worth £300,000 when the true market value is only £100,000.

How can the regulatory authorities have allowed increasingly exotic “off-balance sheet instruments” to have grown to a $65 trillion market, when only a few short years ago it was negligible, without taking any steps to regulate this unprecedented growth?

Friday, April 18, 2008

Chairman Federal Board of Revenue, Abdullah Yousaf, on Friday said there was a global change in the tax system, and policy of tax exemption was being discouraged. Ratio of tax may be lowered to bring the people in the tax net, rather than to give tax exemptions and stressed for increasing the tax base by 30 percent to40 percent.

Addressing the business community in Islamabad Chamber of Commerce and Industry (ICCI) the FBR chairman said, “ Presently there are about two million tax payers in the country and this number needs to be increased.”

Chairman proposed that Islamabad should a model tax payee city, so as to replicate this model in other cities to expand the tax base. He said that ratio of taxes has been gradually reduced which were high in the past, which helped in increasing the number of tax payers.

He appreciated the proposal of president ICCI of imposing one percent to two percent investment tax to encourage local investment, without asking the source of investment. He said that FBR would consider this proposal and would see how it could be practically implemented. On the suggestion of ICCI, Yousaf said Sales Tax form would be made simpler and would also be considered to print it in Urdu language. The FBR was encouraging e-filling and currently 25,000 people were registered for e-filling, out of which 14,000 had filed the e-returns and expected for increase in this number.

Thursday, April 17, 2008

LOS ANGELES -- This week, the television show "Jeopardy!" featured a category titled "April 15th," filled with fun facts about the dire day. Let's see how much you know about U.S. tax history.

What was the first tax imposed upon the American Colonies? How did the U.S. pay the debts generated by the American Revolution?

Property taxes, based on acreage and improvements;

excise taxes on liquor, tobacco, sugar, auctions;

head taxes, levied on each person in household and servants and slaves;

travel taxes, fees to enter and exit the country;

All of the above. Why was the first personal income tax assessed in the U.S.? Which amendment to the Constitution made income taxes permanent? What was the range of the first tax rates or brackets? When was a Social Security tax first imposed? What problem was it intended to solve? When did income tax withholding become a permanent part of our lives? Why is illegal income taxed, right along with legal income? When was the Internal Revenue Service formed? What is the Internal Revenue Service's mission statement?

Wednesday, April 16, 2008

Fair value accounting, by which debt and equity securities on a company's balance sheet are "marked to market" - written up or down to their market price - has been hyped by accountants and regulators as the epitome of modern financial reporting, enabling investors to gain a completely true picture of their investment's financial position.

Indeed, Gerald White of the Chartered Financial Analyst Institute, speaking at an American Enterprise Institute conference on Tuesday, believes it should be applied to all items on the balance sheet, not just financial instruments. There is just one problem: in the turbulence of the past nine months, it has completely failed to work and has indeed shown itself to be pro-cyclical, encouraging economically foolish behavior in both up and down cycles.

As someone who only thinks about accounting once a decade or so, I wasn't really aware that much had changed from my business school days in the early 1970s. At that time, the values of assets on the balance sheet didn't move much. Everything the company owned was dumped on the balance sheet at cost price and stayed there for decades while the world turned. The only exception was when the company held bonds or shares that had declined catastrophically in value (the occasional wobble was ignored) in which case they were declared "impaired" and their value written down.

Tuesday, April 15, 2008

Mark-to-market accounting was thought of to give assets a value that is current and relevant. But when experts differ widely on valuation, does the subjective assessment have much relevance?

The sub-prime crisis has put questions before a number of institutions and instruments — securitisation, rating agencies, mortgage origination process, etc. Questions also need to be raised about something that became a part of the world of complex accounting rules — fair value accounting, or what in popular parlance is called mark-to-market (MTM) accounting.

The MTM rule is not an age-old accounting convention; rather, it is an exception to the age-old accounting rule called historical cost convention. Several bankruptcies in the 1995-1998 period — from the collapse of Barings Bank in 1995 to the big-time failure of Long Term Capital Management — drew a consensus among accounting standard setters that historical cost is not the most relevant information for users of financial statements as they would be interested to know the current value of the assets of the entity.

Monday, April 14, 2008

Reversing a trend, more Americans are expected to file by Tuesday's deadline to get their economic stimulus payments.

There's nothing like a little stimulus to get taxpayers to file on time.

As of early April, about 9% more federal tax returns had been filed than at this time a year ago, the Internal Revenue Service said. The reason could be the economic stimulus law passed by Congress -- because to get a rebate check you have to file a federal tax return.

Returns for the 2007 tax year must be filed electronically or postmarked before midnight Tuesday, unless the taxpayer files a request for an automatic extension. (Taxpayers living outside the U.S. get automatic two-month extensions and members of the military serving in combat zones don't have to file until 180 days after their return.)

The IRS had estimated that extension requests would rise to 10.3 million this year from about 10 million last year, but that forecast was made before Congress passed the stimulus bill. The checks are scheduled to start going out in May.

Sunday, April 13, 2008

It’s not too late to file your federal income taxes by the midnight deadline Tuesday — which could payoff twice this year for many taxpayers in Alabama and across the nation.

It’s not too late to file your federal income taxes by the midnight deadline Tuesday — which could payoff twice this year for many taxpayers in Alabama and across the nation.

Eligible taxpayers who file a 2007 federal income tax return may also receive an economic stimulus payment — or rebate — from the U.S. Department of the Treasury. The rebate checks will be mailed out starting in May.

The possibility of receiving a rebate check, however, has encouraged more people to file their 2007 federal income tax returns before the Tuesday deadline, Internal Revenue Service Media Specialist Dan Boone said.

The IRS first predicted that 120,000 Alabamians would file extension requests this year, but the agency now expects that number to drop, Boone said.

Friday, April 11, 2008

In view of the expected shortage of approximately ten lakh accountants in the junior level in the next 10 years, Institute of Cost and Works Accountants of India (ICWAI) has launched a certificate course in Accounting Technician (CAT) today.

The course has been designed especially to cater to the Small and Medium Enterprises (SME), retail sector, KPO and BPO Sectors and panchayats, following a recommendation by the Union ministry of corporate affairs. The course is aimed at developing accounting skills of students belonging to the rural areas, who cannot afford an expensive professional course.

Thursday, April 10, 2008

Bureau of Internal Revenue (BIR) regional director Atty. Marcelinda Omila-Yap and Revenue District Officer Jose Eric Furia are spearheading the two-day tax forum-seminar for all practicing bookkeepers and would-be bookkeepers which started yesterday and will end today Wednesday (March 26) at the RDO seminar hall, F. Torres, Davao City.

The taxation forum is one of the projects of the Davao Bookkeepers and Services Association in coordination with its president Ms. Laude Balicug, according to RDO assessment division chief Ms. Susan Tusoy.

Bookkeepers are required to attend the two-day taxation forum so as to keep them abreast of the latest policies and regulations of government as far as revenues and taxes are concerned including the rules governing bookkeeping, books of accounts and related taxes on business bookkeeping.

Wednesday, April 9, 2008

Don’t miss out on this year’s economic stimulus payments. They will start going out in early May.

But you must file a 2007 tax return to claim your payment, even if you’re a senior, a veteran or a lower-wage worker who normally is not required to file.

You might be eligible for that stimulus payment if you had at least $3,000 in qualifying income from Social Security, Railroad Retirement or Veterans Affairs benefits or earned income such as wages, tips and self-employment.

Tuesday, April 8, 2008

AS-30 has a whole set of rules on hedge accounting. The rules are pretty stringent and in many cases it may be impossible to apply hedge accounting because the rules cannot be complied with. This may be so, even if there was a perfect economic hedge.

AS-30? Derivatives? MTM? If you are a keen reader of business news, a lot of these accounting hieroglyphics have been appearing in the past few weeks.

There has been so much noise about accounting policies, but none of it has been music to either companies or investors in listed entities. Business Line attempted to get in touch with tax and accounting giant Ernst and Young (E& amp;Y) to present facts as they are. Mr Dolphy D’Souza, Partner, E&Y, gives us a few important answers taking help from the firm’s knowledge repository.

Sunday, April 6, 2008

NEW DELHI: For those of you who have just appeared for the twelfth standard exams and feel you have some aptitude with numbers, accounting is all set to offer an all-new avenue. Come August, the country's apex accounting body, Institute of Chartered Accountants of India (ICAI), will offer a new two-year 'accounting technician' course to prepare students for mid-tier positions in the accounting field. The good news is that the fee for the course, that comes with placement promises by ICAI, will be as low as Rs 10,000 and students from all streams can opt for it, including from humanities and science.

ICAI president Ved Jain said the course would offer a new employment avenue to thousands of students passing out of school. While the actual duration of the theoretical course will be around one year, the next year will have to be spent on practical training, where a student can also expect to start earning through stipend.Read More Article...

Friday, April 4, 2008

Accounting techniques like budgeting, sales projections and financial reporting are supposed to help prevent business failures by giving managers realistic plans to guide their actions and feedback on their progress. In other words, they are supposed to leaven entrepreneurial optimism with green-eye-shaded realism.

At least that's the theory. But when Gavin Cassar, a Wharton accounting professor, tested this idea, he found something troubling: Some accounting tools not only fail to help businesspeople, but may actually lead them astray.

In one of his recent studies, forthcoming in Contemporary Accounting Research, Cassar showed that budgeting didn't help a group of Australian firms accurately forecast their revenues. In a second paper, he found that the preparation of financial projections added to aspiring entrepreneurs' optimism, leading them to overestimate their subsequent levels of sales and employment.

He is not suggesting that anyone ignore accounting activities and techniques. Investors and regulators expect firms to implement robust accounting systems. And they should, he says, because financial reports provide a detailed map of a business and its performance. But Cassar believes that businesspeople - especially entrepreneurs, who bet both their reputations and personal wealth on their ventures - should understand the limitations of accounting estimates as well as how common human tendencies , like optimism, can lead to their misinterpretation.

Thursday, April 3, 2008

Small business bookkeeping software brings so many benefits to the owner/manager. All startup businesses go through an awkward stage in which the owner is still taking care of all the sales and all the paperwork, but realizes the business is prospering. Of course, this is the very reason for going into business, but the owner must decide on the point at which employees and bookkeepers must be hired, at least part time.

Small business bookkeeping software may enable the owner to delay the expense of hiring assistants. Paperwork in any enterprise is extremely time-consuming, but bookkeeping software or a computerized sales activity report cuts time spent on paperwork. Any owner/manager needs time to contemplate the direction the business should go in, and automation that deals with details permits the owner to think about future plans.

Software Assists Any Business

The type of business is irrelevant to the issue of whether or not to use computer programs. Any business, large or small, needs to be run according to good business practices, starting with a business plan. All businesses must pay property taxes, income taxes, and insurance.

Business terms and forms are fairly uniform whether a person owns a flower shop or an auto repair shop. This is why software applies to small businesses that need to streamline their operation and become more efficient in covering all requirements from city, county, state, and federal governments. Computers relieve the small business owner of the need for detailed calendars with deadlines and reminders!

Wednesday, April 2, 2008

One year from, March 31, 2009, the Software Technology Parks of India tax scheme will sunset. When this happens, Indian companies will find their taxes increased from 10% to 20%. Depending on your specific contract terms addressing taxes, material changes, or other sections (talk with your legal team), vendor managers may be confronted with higher rates. What can you do to manage this?

First, some background information. STPI was created in 1991 to create tax incentives to stimulate India’s then-fledgling software export industry. It provides a combination of incentives, but the big incentive is the 10-year corporate tax exception granted to new organizations (Indian companies consistently create new organizations to restart the 10-year clock). Today, 95% of India’s software and BPO exports are subjective to this incentive. Exports are the services you are buying if you or one of your vendors outsourced work to a foreign country. Indian companies have been unsuccessfully lobbying the Indian government to extend STPI, but one never knows.

Tuesday, April 1, 2008

GEORGETOWN --A city-funded group paid thousands of dollars in late payroll taxes because of bad bookkeeping, an audit has found.

Georgetown Renaissance Inc., a revitalization group that helps downtown businesses and residents, had paid $11,026.62 last year to the U.S. Treasury in late taxes and fees, according to a bank statement.

The audit, conducted by Kelley Galloway & Co., found that the payroll taxes were filed late for 2005 through 2007, resulting "in substantial penalties and interest."

Kitty Dougoud, who became director of the organization last August, said some quarterly filings of payroll taxes with the Internal Revenue Service actually were overpaid, but the correct forms did not accompany the payments.

The audit recommended that "more care be exercised to ensure the timely filing of all payroll tax returns."

The delinquent taxes weren't a result of intentional wrongdoing, but taxes were filed incorrectly, said Andrew Green, a Georgetown Renaissance Board member.

Mayor Karen Tingle-Sames said the audit was presented to the council last week, but the council has not decided what action to take, if any.

Dougoud said Georgetown Renaissance Inc. has asked the IRS to apply some of the overpayments toward the delinquent taxes.

"It was very careless bookkeeping and in turn, it caused a lot of work," Dougoud said. The organization had to use about one-third of its annual funds from the city to pay the IRS, she said.

The group receives $40,000 a year from the city and $7,500 from Scott County.

The city withheld its latest installment of $15,000 pending completion of the audit, but released the money last week, Dougoud said.

Green said he plans to propose to the board next month that a certified public accountant handle the finances of the non-profit organization.